The Use of FICO Scores in Neponset, Illinois

In Neponset Your FICO Score is Important

Here are the Best Ways to Improve Your Credit Report FICO Score 

In Neponset, Illinois one of the most frequent discussions with friends would be connected to credit report. The reason behind this is due to the fact that the score achieved by any person would significantly affect the amount of mortgage, car loans and many other financial costs.

To put it simply, a credit score is like a report card from Neponset High School (I know, we have all been through that) where you would get a reprimand for something low or rewarded for a good performance.

In contrast to what many individuals in Neponset believe, there is not a single, universal way of ranking credit history where the last time you took an extra 5 pennies from the cashier would be recorded on your credit report.

There is however, a widely used popular credit score in the U.S., commonly known as FICO or Fair Isaac Corporation. FICO score basically indicates the likelihood of a person to default on a loan and this is a commonly embraced tool by most banking and loan companies in Neponset.

Before engaging in the discussion on how FICO rating may be increased, it important to have a rough idea on what your FICO rating is based on.

Basically, FICO rating is separated into a few statistical components where these components are made up from:

  • 35% – punctuality of payment historically
  • 30% – the amount of debt, expressed as the ratio of current revolving debt (credit card balances and others) to total available revolving credit (credit limits).
  • 15% – length of credit history.
  • 10% – kinds of credit used (installment, revolving or consumer finance).
  • 10% – recent application for credit and/or amount of credit obtained recently.

The very first step to improving a FICO rating is to obtain a copy of your credit report. This can be attained from Equifax, TransUnion and Experian.

Then, prepare yourself for the agony (or fun if you’re a bookkeeper) of examining all the numbers and ensuring everything adds up to the best of your understanding.

The reason is if something is wrong in your credit report, it’s best to get them corrected immediately because it can take up to months in order to get a update entered.

Next, if you have serious credit card debt where many of your card balances are near the credit line, it’s best if you pay them off as soon as you can. If you need help paying off debt, call for help at 844-CARE-866.

The banks and lenders prefer a significant gap between a credit card balance and the credit limit, approximately a ratio of 40% between balance/limit. Paying off maxed out credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.

Subsequently, it is equally important for you to pay off your debt on time. Even if you are able to pay off your debt, it would not have the desire impact on your FICO score if you do not pay your debt on time and every time.

The punctuality of your payment impacts 35% of your score and it is important to know that paying your debt on schedule NOW is outweighed by the fact that you paid your debt in a timely manner 3 years ago.

It is always important to keep your oldest account. Because the longer you have your financial history established; the easier it is for the creditors or banks to know how reliable your FICO score is.

Even if you score a relatively high score, if your credit history is just 5 years as compared to an average rating with a credit history of 30 years, the person with the longer credit history would possibly receive a larger loan or a lower annual interest rate.

All in all, it’s a not rocket science when it pertains to raising your FICO score. All it takes is for you to decrease your total debt, pay your bills on time and keep an eye on where you are heading in your spending, mortgage and loans. 

There are experts at Credit Repair can help you better understand your FICO score. Enroll in one of their coaching programs to improve your score.

Even if you don’t live in Neponset, Illinois you can call toll free 844-207-3818 in order to get started increasing your credit history and fixing your credit report.

Category: General